EU Suspends Tariff Privileges for Pakistani Sugar Cane Alcohol: What It Means for the Ethanol Market

On 20 June 2025, the European Commission officially suspended Pakistan’s GSP+ tariff privileges for ethanol (both denatured and undenatured). This landmark decision is already reshaping global ethanol trade flows and pricing trends.

Why Did the EU Suspend GSP+ for Pakistani Ethanol?

The suspension was triggered under Article 30 of the EU GSP Regulation due to a serious disturbance in the European non-fuel ethanol market.

Key factors:

• Between 2021 and 2024, EU imports of Pakistani ethanol surged, growing from 132,396 tons in 2021 to 215,929 tons in 2024.
• Import prices fell dramatically – from 7% below EU producer prices in 2021 to 25% below in 2024.
• Pakistan became the largest non-fuel ethanol supplier to the EU with a 27% market share in 2024.
• Meanwhile, EU ethanol production dropped by 10% in 2022 and another 9% in 2023, struggling to compete against cheaper imports.

To rebalance the market, the EU has now reinstated duties of:

• €19.2/HL for undenatured ethanol
• €10.2/HL for denatured ethanol
  

This suspension will remain in place for at least two years.

What Does This Mean for the EU Market?

Rising Ethanol Prices: With the preferential tariff gone, EU buyers will see higher import costs, especially as existing Pakistani stock depletes by Q3 2025.

Shifting Trade Flows: Buyers are now turning to alternative suppliers with FTA or GSP+ access, such as South Africa, and soon Brazil (after the Mercosur agreement implementation).

Increased Competition: The U.S. and Guatemala are also expanding their presence in the EU ethanol market, though without preferential tariffs their competitiveness differs.

The Sasma Perspective

At Sasma, we recognize that market stability and secure supply chains are essential for our partners. The suspension of Pakistani tariff privileges is significant, but we are well-positioned to adapt:

• Diversified Sourcing: We are expanding procurement from other preferential tariff countries to maintain competitive EU supply.
• Global Trade Focus: While Pakistani ethanol may lose its EU advantage, it remains attractive for other esport markets, where we continue to strengthen our market position.
• Price Management: By leveraging our global sourcing network, we ensure that our customers receive stable pricing and consistent availability, despite geopolitical and regulatory shifts.

Conclusion

The EU’s suspension of GSP+ privileges for Pakistan marks a turning point in the global ethanol trade. While it brings challenges for EU buyers, it also creates new opportunities for diversification.

Sasma remains committed to providing reliable, competitive ethanol supply across markets. Our proactive sourcing strategy ensures that our partners can navigate these regulatory shifts with confidence.

Looking for a stable ethanol supply partner during this transition? Contact Sasma today to discuss sourcing solutions tailored to your needs.